U.S. Payroll to Population Rate at 45.7% in October

U.S. Payroll to Population Rate at 45.7% in October
The U.S. Payroll to Population employment rate (P2P), as measured by Gallup, was 45.7% for the month of October, up from 45.1% in September, and reflecting the highest percentage of Americans with good jobs since Gallup began Daily tracking of U.S. employment in 2010.

Gallup's Payroll to Population metric is an estimate of the percentage of the U.S. adult population aged 18 and older that is employed full time for an employer for at least 30 hours per week. P2P is not seasonally adjusted.

These results are based on Gallup Daily tracking interviews, conducted by landline and cell phone, with approximately 30,000 Americans throughout the month. The monthly average for October excludes Oct. 29-30, the two days in which Gallup did not poll due to the effects of superstorm Sandy on the East Coast. Adults who are self-employed, working part time, unemployed, or out of the workforce are not counted as payroll-employed in the P2P metric.

Because of seasonal fluctuations, year-over-year comparisons are helpful in determining how much of the monthly changes are because of seasonal hiring and how much are the result of growth in permanent full-time positions. P2P has now improved by more than a full percentage point over October 2011 and October 2010, when 44.4% and 44.3% of Americans, respectively, were working full time for an employer.

Gallup has studied employment worldwide for the last three years, and has shown that P2P is much more predictive than unemployment of a country's economic health and the wellbeing of its citizens. While P2P is the best metric for measuring the number of good jobs, it admittedly excludes some self-employed and part-time workers who have good jobs.

In October, 4.8% of Americans were self-employed for more than 30 hours per week, and an additional 6.9% of the total population was employed part time but did not desire full-time work. Many of these Americans also have good jobs and are working the number of hours they desire.

Implications

The October growth in P2P employment in the U.S., coupled with the decline in unemployment, is a promising indicator that the jobs situation is improving, and more Americans are returning to work and are finding the good jobs they desire. While the number is up four points over its low point in 2011, there is still considerable room for growth. A large number of Americans continue to be underemployed, and many others may have left the workforce altogether.

Payroll to Population is an important measure to watch as a true barometer of economic improvement. Unlike unemployment rates, the number cannot improve if people drop out the workforce. Any increases in P2P in the coming weeks will be a true indicator that employers are creating good jobs and improving both the economic situation and the wellbeing of American workers.
From: http://www.gallup.com
Updated: November 2, 2012